Airlines appear to be increasingly interested in using new-generation narrowbodies to make thinner long-haul routes more economically viable.
Some of this demand covers routes today operated using Boeing 757s. But new-generation narrowbodies' size and low cost provide the potential for them to serve some long-haul routes in place of widebodies or which were previously not viable. As a result, the long-haul market for these aircraft may be far greater than that of earlier single-aisle types.
Much of that emphasis so far has been on deploying narrowbodies in a premium-class layout on some key, high-yielding routes. But there is also interest in using narrowbodies to open routes to secondary airports as airlines continue to evolve their models.
Notably, there appears particular interest in using these new aircraft types to connect points in Western Europe with East Coast locations in North America.
Norwegian, for example, plans to debut the Boeing 737 Max on transatlantic routes when it begins taking the aircraft next summer; and IAG chief Willie Walsh has hinted at interest in the Airbus A321LR for Aer Lingus, describing it as representing a "fantastic opportunity" for its Irish unit. US carrier JetBlue, meanwhile, has an option to switch 15 A321neos to A321LRs if it decides to firm its interest in launching services to Europe.
WIDESPREAD WIDEBODIES
FlightGlobal schedules data reveals the extent to which widebodies dominate on long-haul routes. On the transatlantic market, for example, widebody types account for more than 92% of all the available seats, with Airbus A330s and Boeing 777s making up the bulk of the market.
The 757 is the only narrowbody with any discernible foothold in the transatlantic market, operating 7% of available seats. The 737 and A320 families currently make up less than 1%.
A similar picture emerges for the Europe-China market. The A330 is the most popular type, providing almost 40% of available seats, followed by the 777 (18%) and the 787 (under 9%). Here, the 737 and A320 families account for almost 6% of seats, the 757 for just 1%.
Where single-aisle aircraft are present on long-haul routes, they are often serving niche markets in an all-business configuration. SAS started an all-business 737 service between Copenhagen and Houston this summer, while La Compagnie operates a scaled-down business product with 757s from London Luton and Paris to New York – although the carrier has decided to cease its service from the UK airport on 25 September, blaming the nation's vote to exit the European Union.
Icelandair and Wow Air, meanwhile, use 757s and A321s respectively for the relatively short journey to the USA from Reykjavik.
Until recently, it looked likely that fuel-efficient widebodies such as the 787 and A350 would inherit many of the long-haul routes currently operated by A330s, A340s, 767s and 777s.
But with the advent of a new generation of re-engined long-range 737 Max and A320-family aircraft, and the arrival of the Bombardier CSeries, that assumption is open to question.
In a two-class, 185-seat configuration, the Airbus A321LR – set to enter service in 2019 – has a range of up to 4,000nm (7,400km), while the 737 Max 9, to enter service in 2017, can offer a range of 3,515nm in a two-class configuration when equipped with an auxiliary fuel tank.
The Bombardier CS100, with a range of 3,100nm earlier this year entered service with Swiss while the CS300, with 200nm extra range, is to be delivered to Air Baltic in October.
Airbus maintains that the A321LR is the ideal aircraft to replace the 757 for long-range flights and fill the perceived 200- to 270-seat gap in the middle-of-the-market segment.
AIRLINE INTEREST
Several carriers are already talking with enthusiasm about the opportunities the A321LR and 737 Max could present within their long-haul networks.
Norwegian plans to debut the Boeing 737 Max on transatlantic routes as early as June 2017, potentially making it the launch operator of the latest 737 variant.
"You have the same seat pitch with the new seats on the Max just about as we have on the Dreamliner but you need a little bit more if you fly 13-14 hours, that’s obvious, but six to seven hours that’s no problem," says chief executive Bjorn Kjos, indicating that a narrowbody would not pose a customer service challenge.
Kjos notes that the Max can be operated at a "really, really low cost, even lower cost than the [787 Dreamliner] per seat". He points out that Norwegian already operates relatively long flights with narrowbodies, such as the Oslo-Dubai route, successfully. One issue the Scandinavian carrier does have is whether to include inflight entertainment on its transatlantic Max flights.
"That boils down to weight, everything we do with an aircraft we are thinking, weight, weight, weight because weight is fuel and fuel is cost. So that is an issue we have if we have IFE. If we have wi-fi in the future you should really quit [using] IFE because of the weight".
The Oslo-based low-cost carrier plans to begin flights to New England from points in Ireland and the UK a month after it takes delivery of its first 737 Max 8 in May 2017, says commercial chief Thomas Ramdahl.
Norwegian is scheduled to take delivery of six Max 8s in 2017, all of which it plans to fly across the Atlantic, he adds.
"We're working to finalise negotiations with airports from New York up to Boston," he says, adding that the airline plans to announce 737 Max service to three airports by the end of this year.
Other carriers are showing interest. In noting the potential the A321LR could offer for Aer Lingus, IAG chief executive Willie Walsh has reiterated interest previously expressed by the Irish carrier's chief executive Stephen Kavanagh, who indicated the type could replace its 757s on transatlantic routes.
Air Lease and TAP Portugal, which are A321neo customers, have also disclosed interest in the long-range option, while media reports have linked Portugal's SATA to the variant. SATA is in the market to replace its A310s.
Low-cost carriers are also alive to the opportunities. Norwegian has orders for the A321LR. It has also disclosed plans to use the 737 Max for services from Shannon and Cork in Ireland to Boston. Neither route is currently served.
JetBlue, with orders for 116 A321s, has left open the possibility that it might opt for the long-range version. The US carrier has previously indicated an interest in starting flights to Europe, a task the A321LR could address.
UK-based start-up Odyssey Airlines has 10 CS100s on order and has previously suggested these could be used to operate from London City airport to such destinations as Dubai and New York.
NETWORK OPPORTUNITIES
Several carriers have already adapted their long-haul networks around narrowbody types.
Copa Airlines, which does not operate widebodies but has built up a network around the 737, can reach much of North and South America from its hub at Panama City.
Turkish Airlines has built a niche for itself using both Airbus and Boeing narrowbodies to link Istanbul with cities that Emirates serves using widebodies.
Flight Ascend Consultancy's Richard Evans suggests that both Copa and Turkish could benefit from even longer-range aircraft, which could, in the case of the Panamanian carrier, bring more cities in North and South America within its sphere and, for Turkish, open up opportunities in the Indian subcontinent.
Turkish and Copa, he notes, have each been forced to compromise on the number of seats they can offer on longer-range routes.
"Many low-cost carriers, and indeed many major network carriers, in Europe and Asia have now configured their aircraft with the maximum seats possible – around 180 in the case of the A320 or 189 in the case of the 737-800," says Evans.
"However, to maximise range capability, and to offer a high-quality business-class service, some airlines have much lower-density seating layouts. Copa has two sub-fleets of 737-800s, with the version used on longest flights offering a full business-class product with four-abreast 50in-pitch seats for a total of just 154 seats.
"Although business-class seats are much heavier than economy-type seats, nevertheless a 154-seat aircraft will have a few hundred miles more range than one with 189 seats."
PROS AND CONS
Operating narrowbodies on long-haul routes offer a number of potential benefits to airlines. From an operational standpoint, narrowbodies can be turned around more quickly than widebodies and do not require specialist airbridges and support infrastructure. This could make them especially useful for operating to secondary airports which have typically catered to short-haul domestic or regional customers.
By operating to thinner secondary markets, and avoiding the hubs, airlines can also take advantage of the lower fees charged by smaller airports and can leverage some pressure on major gateways by presenting them with potential rivals. New routes to new airports also tend to come with the added incentive of lower airport charges or marketing support to aid the growth of a new route.
Narrowbodies, with their quicker turnaround times, allow more rotations on a particular route or sector length, a key reason that narrowbodies have become ubiquitous on short-haul routes. However, on balance, airlines will be minded that rotations will be much reduced on long-haul markets.
A challenge lies in offering a pleasant customer experience for business-class or premium customers and a tolerable level of comfort for economy-class passengers.
Onboard entertainment and catering will need to be adapted to the needs of passengers on longer flights, although this might be offset to some extent by customer behaviour – many now prefer to bring their own entertainment systems with them on the flight.
From a financial point of view, narrowbodies can be acquired in a more flexible way than widebodies. Leasing widebodies is far more difficult to arrange than it is for smaller aircraft. Lessors' fleets are often skewed towards favouring single-aisle jets, meaning airlines have more choice when looking to lease, say, an Airbus A320 over an A330.
If an airline wants a largely off-balance-sheet asset, or does not have the appetite to raise financing to buy, then narrowbody leasing is an easily available, efficient and relatively cheap option.
Narrowbodies are less expensive than widebodies, and trump them when it comes to asset disposal. If the narowbodies are either Airbus or Boeing types, there is normally a buoyant secondary market into which they can be sold or sub-leased.
BUSTING THE HUB BUSTER?
The popularity of the 787 reflects its reputation as a "hub buster" which allows profitable operation on long thin routes that are not viable for less fuel-efficient widebodies, without the need to draw feed from a hub.
Rob Morris, head of Flight Ascend Consultancy, suggests that narrowbodies such as the new A321LR could play a similar role or even usurp the 787 on some thin long-haul routes.
In its recent quarterly presentation, Norwegian highlighted the A321LR and noted that the aircraft offers 40% lower trip cost and 15% lower seat mile cost versus an unidentified widebody type or types – perhaps the 787-8, which the carrier already operates.
"Clearly, on routes up to 4,000nm the [A321LR] would always be the preferred aircraft in risk terms for any airline, albeit with a lower payload potential than that offered by widebody aircraft," adds Morris.
He says the lower payload offered by each aircraft will be a key determinant in what routes they can operate on profitably. He gives the example of the CSeries, which has the necessary range but in the sub-130-seats category.
"In this regard, there is real potential for single-aisles to supplement widebody aircraft on long-haul – although, in reality, perhaps we should be calling these medium-haul – markets servicing thinner routes which previously had no market economic rationale given their demand and yield profile," he says.
With the Max not due to enter service until next year and the A321LR not until 2019, their impact on long-haul markets remains hypothetical, and Evans points out that it won't be until 2026 that the fleet of A320neos exceeds the fleets of current A320s – and 2028 that the Max fleet overtakes the current 737.
But what is clear is that several airlines, especially the industry's traditional disruptors – the low-cost carriers – are keen to use the new narrowbody types to open up new markets and challenge existing network patterns.
Additional reporting by Jamie Bullen and Edward Russell
Source: Cirium Dashboard
